Mumbai: ACK Media, which owns brands such as Amar Chitra Katha, Tinkle and Karadi Tales, has acquired a 100% stake in India Book House Pvt. Ltd (IBH), one of the largest and oldest distribution networks for books and other published material.
The new entity, IBH Books and Magazines Distributors Pvt. Ltd, will be one of the largest integrated publishing and distribution companies in India.
ACK Media, registered as Amar Chitra Katha Pvt. Ltd, is also looking to raise nearly Rs100 crore in the next 18 months to expand its portfolio of products and promote itself in India and abroad.
“The new entity would have (a) robust infrastructure of 10 offices in major metro cities across India, a distribution network that includes over 2,500 stores and over 22,000 vendors, thus allowing us to penetrate not just the top 12 cities, but the top 400 cities in India in a very meaningful manner,” said Ashish Goel, chief operating and financial officer of ACK Media.
Goel will be managing director of the new entity, which will be a one-stop shop for people looking to buy children-related content or merchandise, he said.
Both ACK Media and IBH refused to elaborate on the size of the deal.
The acquisition gives ACK Media more control over the distribution of its content. It can now also distribute a wider range of products, from comic books and home videos to toys, merchandise and stationery, all over the country.
“ACK Media...is a good brand and they are sitting on some really good IP (intellectual property). The success of this new entity will depend largely on their ability to exploit their brands,” said Jehil Thakkar, executive director, media and entertainment practice, KPMG India. “To my mind, this could fall either way. This is largely uncharted territory here, as there are no real instances of Indian character-driven IP being exploited. But they seem to be putting up all the building blocks by strengthening their content as well as reach.”
ACK Media’s application for approval of Rs90 lakh in foreign investment has also been cleared by the Foreign Investment Promotion Board.
Tusk Investments, Mauritius, a wholly owned subsidiary of private equity firm Elephant Capital, will make the investment in lieu of a 29.3% stake in ACK Media.
The company is also looking to raise another Rs90-100 crore through private equity deals, qualified institutional placements and a public offer.
“Overall, we are looking to raise funds over the next 18 months,” said Samir Patil, founder and chief executive of ACK Media.
Goel said the firm is hoping to generate Rs150 crore in revenue in fiscal 2011.
“With an additional investment of Rs90-100 crore, our objective is to take this figure, over the next three-four years, to the Rs500 crore mark,” Patil said. “Given the scale we will have by end of the year, we should be good to go to the public. Of course, this would take into consideration, shareholder as well as market sentiment, and whether the time is right to go public.”
Patil said the money will be pumped into four main growth areas. The first of these will be expanding the reach of the firm’s content and products. ACK Media will also look to expand its portfolio of characters and brands, both organically and through acquisitions.
It will then launch “family experience centres” through joint ventures in Indian cities and abroad, where consumers can familiarize themselves with ACK Media products. Finally, it will promote itself among schoolchildren with special schemes that integrate its content with school programmes, said Patil.
“The potential for children’s content is huge across media such as television and mobile, among others,” said Thakkar of KPMG India.